Crawshaw Group Regulatory News (CRAW)

7 Nov 2005 07:00

Felix Group PLC07 November 2005 7 November 2005 Felix Group Plc PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 2005 HIGHLIGHTS • Placing of new shares with institutions raising £4m in September 2005, further to £3m raised in October 2004 • New prototype cash machine incorporating Everyone's A Winner proposition now developed • Agreements announced with Alliance & Leicester Commercial Bank and Trinity Mirror • £10m prizebank sponsorship agreement announced with PowerHouse retail group OUTLOOK Since the financial year end, the business raised additional equity funding of£4 million, and announced exciting new developments with both Alliance &Leicester Commercial Bank and Trinity Mirror. We now have a debt free balancesheet with cash in the bank and our intention is to put this additional capitalto good use as we continue to develop and deploy alternative, more sophisticatedmethods of distribution for our "Everyone's A Winner" ("EAW") sales promotionproposition. We are now very well positioned to exploit the overall EAW proposition across arange of consumer markets. Our agreement with Alliance & Leicester Commercial Bank, announced on 14September, involves the development of a new prototype cash dispensing machinewith EAW as an integral feature and we are on course to install the firstmachine before the end of 2005. A successful phase one roll-out will give Felixthe potential to install ATM machines across a wide range of new and existingsectors, including but not limited to, retail, leisure, sport and corporate. Inaddition, we are developing additional revenue generating solutions which buildupon our core EAW proposition, including on-line and mobile content which can beincorporated within the same infrastructure. We have also begun to build a specific prizebank to support the rollout with theannouncement of a £10 million retail sponsorship agreement with the PowerHouseretail group. We are currently in discussions with other major retailersregarding additional such agreements with the objective to have in excess of £50million in prizebank facilities. We have also entered into a marketing agreement with Trinity Mirror to jointlypromote the EAW proposition across selected titles within the Trinity Mirrorportfolio on a revenue share basis. Readers will be able to access EAW bylandline, mobile or SMS. We have continued to strengthen our executive team. We now have an experiencedmanagement team across all of the disciplines we have identified as key to thebusiness. These include prizebank product procurement, marketing, operations andsoftware development, where we continue to create significant IntellectualProperty. This period has also seen the departure of Alasdair Waddell as group ChiefExecutive. Alasdair left for health reasons and has been a tremendous help tothe group, not least in providing the company with the platform to list on AIMlast year. The board would like to thank Alasdair for his tremendous commitmentto the group during his tenure with the company, and we wish him the very bestfor the future. We are delighted that Andy Egan, the founder and creator ofEveryone's A Winner, has taken the post as Chief Executive. We are certain thatAndy will bring the same enthusiasm and determination to the post of ChiefExecutive that he did as Executive Vice-Chairman. Our listing on AIM last year has provided us with the resources required toimplement our strategy and we now have a strong shareholder base. We believethat the next 6 months will be an important period for the company as we deploysome of our new models for revenue generation whilst building long termshareholder value. We intend to concentrate on growing the business organicallyand will consider other opportunities which both complement our existingbusiness models and create sustainable growth and profitability. The pre-tax loss for the year to 31 May 2005 was £3.2m. Income during the periodwas, as expected, negligible. We expect to make rapid progress in the months ahead we look forward toreporting this to shareholders as we reach our major target landmarks. CHIEF EXECUTIVE'S REVIEW The past year has seen the management climb a steep learning curve and we havegleaned a great deal of knowledge as a result. This ranges from improvedmanufacturing components for our terminals to prizebank content enhancement.Both of these aspects are critical and are now much more refined. I am also pleased to report that we are well on our way to unveiling a radicallydifferent type of prototype ATM terminal. Whilst this terminal will dispensecash in the usual manner, it also includes the unique 'Everyone's A Winner' ("EAW") value added proposition we have developed; each consumer will receive aretail or leisure reward worth at least twice as much as the cost of the ATMusage charge. The banking services will be provided by Alliance & LeicesterCommercial Bank. The terminal will also have the ability to offer other webbased services such as mobile phone top ups and music downloads. A number ofother commercial applications are also being reviewed. Felix is now ready to deploy a proposition that has taken 5 years to bring tomaturity. We have recently completed the establishment of a high qualitymanagement team which has significant strength in depth. I am delighted with theappointment of John Liwosz as Managing Director of Felix Corporation Limited.John also joined the plc board as Executive Director, Group Operations on 14September and his knowledge and experience will be of great value going forward.Lynda Sherratt has also recently joined us and brings a wealth of operationalexperience across interactive media, telephone and retail businesses followingher previous employment at Littlewoods. The skill and dedication of our entireworkforce continues to impress me and I believe that the management team isready to deploy our proposition across all platforms. Andy Egan, Chief Executive Group Profit and Loss Account Year ended 31 May 2005 Note 2005 2004 £'000 £'000 TURNOVERContinuing operations 35 -Acquisitions - 2 TOTAL TURNOVER 35 2Cost of sales (246) (50) GROSS LOSS (211) (48)Administrative expenses (3,015) (787)Other operating income 20 5 OPERATING LOSS Continuing operations (3,206) (497) Acquisitions - (333) GROUP OPERATING LOSS (3,206) (830)Interest receivable 41 19Interest payable (59) (22) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (3,224) (833)Taxation - - LOSS ON ORDINARY ACTIVITIES AFTER TAXATION RETAINED FOR (3,224) (833)THE YEAR LOSS PER SHARE - BASIC 2 (3.1470)p (3.0935)p The comparative period is from 7 May 2003 to 31 May 2004 and includes thetrading figures for the main subsidiary for the period from 8 March 2004 to 31May 2004. There are no recognised gains or losses other than those passing through theprofit and loss account. Group Balance Sheet As at 31 May 2005 2005 2004 £'000 £'000FIXED ASSETSIntangible assets 11,348 12,645Tangible assets 92 112 11,440 12,757 CURRENT ASSETSStock 33 27Debtors 245 217Cash at bank and in hand 879 566 1,157 810 Creditors: amount falling due within one year (702) (661) NET CURRENT ASSETS 455 149 TOTAL ASSETS LESS CURRENT LIABILITIES 11,895 12,906 CREDITORS: amounts falling due after more than one year (17) (737) 11,878 12,169CAPITAL AND RESERVESCalled up share capital 1,088 950Share premium account 14,847 12,052Profit and loss account (4,057) (833) EQUITY SHAREHOLDERS' FUNDS 11,878 12,169 Group Cash Flow Statement Year ended 31 May 2005 Note 2005 2004 £'000 £'000 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 3 (2,157) (994) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 41 19 Interest paid (59) (22) (18) (3) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTProceeds from the sale of tangible assets 12 -Payments to acquire tangible assets (22) (10) (10) (10) ACQUISITIONS AND DISPOSALSNet cash acquired with subsidiary undertaking - 66 NET CASH OUTFLOW BEFORE FINANCING (2,185) (941) FINANCINGIssue of shares net of cost 2,933 1,516Repayment of short term loans (45) -Repayment of long term loans (370) -Repayment of finance lease and hire purchase contracts (20) (9) 2,498 1,507INCREASE IN CASH 313 566 Notes: Note 1 - Publication of non-statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The financial information for the year ended 31 May 2005 has been extracted fromthe Group's financial statements to that date which have received an unqualifiedauditors' report but have not yet been delivered to the Registrar of Companies. Note 2 - Loss per share The calculation of basic loss per share is based on a loss of £3,224,000 (2004 -£833,000) and on 102,458,331 (2004 - 26,927,697) ordinary shares, being theweighted average number of ordinary shares in issue during the period. As the Group reports a loss for the period then, in accordance with FinancialReporting Standard Number 14, the share options in issue are not considereddilutive. Note 3 - Reconciliation of Operating Loss to Operating Cash Flows 2005 2004 £'000 £'000 Operating loss (3,206) (830)Depreciation 31 9Profit on disposal (1) -Amortisation 1,297 324Costs exchanged for shares - 86Movement in stocks (6) -Movement in debtors (28) 16Movement in creditors (244) (599)Net cash outflow from operating activities (2,157) (994) Note 4 - Reconciliation of Net Cash Flow to Movement in Net Funds (Debt) 2005 2004 £'000 £'000Increase in cash and change in net funds resulting from cashflows 313 500Cash outflow from decrease in debt and lease financing 435 513Acquisitions - (1,288)Changes in net debt resulting from cash flows 748 (275)Hire purchase (4) (11)Net debt at 1 June 2004 (286) -Net funds/ (debt) at 31 May 2005 458 (286) Note 5 - Annual Report A copy of the Annual Report and Accounts will be sent to all shareholdersshortly and will be available from the Company's registered office, Cherry TreeHouse, Cherry Tree Lane, Rostherne, Cheshire, WA14 3RZ Enquiries: Felix Group plc Mike Wallwork Tel: 01565 831 100 Mob: 07795 613 844 e-mail: mike@felixcorp.com Teather & Greenwood Mark Dickenson Tel: 020 7 426 9000 NOMAD and broker for Fred Walsh e-mail:Felix Group plc mark.dickenson@teathers.com fred.walsh@teathers.com Holborn David Bick Tel: 020 7929 5599 PR for Felix Group plc e-mail: info@holbornpr.co.uk Note to Editors Felix Group plc (Reuters FLX.L Bloomberg FLX LN) www.felixcorp.com This information is provided by RNS The company news service from the London Stock Exchange